Data centers remain one of bright spots in commercial real estate
- November 10, 2011
The U.S. data center market will continue to grow in the latter half of the year as demand shows no signs of slowing, according to a report from Chicago-based Jones Lang LaSalle.
In it its mid-2011 U.S. Data Center overview, the reports says a thaw in capital markets is allowing providers and users of data center space to make decisions, releasing years of pent-up demand and resulting in higher deal volume,
Bo Bond, the co-lead on JLL’s Data Center Solutions team, said in a statement that “energy will continue to be one of the biggest market drivers. As power consumption in data centers continues to increase, users are increasingly concerned with power redundancy, capacity and cost.”
In Northern Virginia, the supply of data centers is increasing and rents are softening in what is a top U.S .data center market, particularly in the Ashburn area of Loudoun County. As of August, the vacancy rate stood at 8.25 percent. The report said that over past decade, more than 4.2 million square feet of data center space has been delivered in Northern Virginia, which continues to draw speculative developments from data center providers.
As the appetite for faster and more efficient technology continues to grow, so will the need for increased space to house it. Over the next five years, Jones Lang LaSalle expects to see data centers in more remote areas such as the Pacific Northwest, North Carolina and the cooler sections of the Midwest. “There is an insatiable amount of demand happening across the globe,” said Bond. “As speculative development commences, we will begin to see a new crop of winners and losers in the data center arena.”